Nigeria’s biggest cement maker Dangote Cement is planning to sell a 20 per cent stake through a global share offering in the next 18 months as it gears up for a construction boom in Africa, a senior executive said on Monday.
Dangote Cement will list on Nigeria’s stock exchange on Oct. 26 after a merger with local rival Benue Cement, in a deal valuing it at US$14bn and making it the country’s largest company by market capitalisation.
Chief Operating Officer Kunle Alake told Reuters the Nigerian Stock Exchange had given the firm two years to sell down a 20 per cent stake in the combined entity in order to comply with the minimum 25 per cent free float requirement.
"Preferably within 18 months I think we should be able to complete the exercise. There would be a global offering most likely within the next 18 months," Alake said in an interview.
"It will be an offer for sale, so Dangote Industries Limited will be divesting 20 percent to meet the listing requirement ... At this point, the decision is not to do a strategic placement ... We are looking at making it open to every investor."
Billionaire tycoon Aliko Dangote is the majority owner of both cement firms through his holding company Dangote Industries, meaning the combined free float after the deal will be 4.1 percent, well below the minimum requirement.
Dangote Cement plans to offer NGN13.5bn (US$90m) worth of shares in Nigeria when trading begins in the new entity on Oct. 26, which will take the free float up to five per cent.